Posts Tagged ‘ev tax credits’

Tesla buyers may no longer qualify for federal tax credits by the time the Model 3 reaches showrooms.

When the Tesla Model 3 finally goes into production, in late 2017 or early 2018, buyers might be in for an unpleasantly costly surprise – one that fall particularly hard on customers who were hoping to get that new battery sedan at a relatively affordable price.

American motorists buying the carmaker’s two current products, the Models S and X, stand to receive federal tax credits of $7,500. Industry analysts say that incentive has helped draw many buyers into the battery-car market. But under federal guidelines, those givebacks might be gone before the first Tesla Model 3 hits the road.

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When Congress passed the measure aimed at spurring demand for battery-based vehicles – including both plug-in hybrids and pure battery-electric vehicles, or PHEVs and BEVs – lawmakers set a cap on those incentives, limiting them to just the first 200,000 vehicles sold by a particular automaker.

Battery cars like the Mitsubishi i ran up $135 million in federal subsidies to buyers last year.

The U.S. battery car market got off to a slow start last year. From the standpoint of a deficit-ridden Treasury, that’s probably the good news.

A quick run of the calculator suggests that the federal government provided about $135 million in subsidies during 2011 for purchasers of vehicles like the Nissan Leaf and Chevrolet Volt. And with sales likely to more than double this year, the hand-outs – in the form of federal tax credits – will also rise sharply.

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In all, American motorists purchased about 18,000 battery-electric vehicles, plug-in hybrids and extended-range electric vehicles, or E-REVs, in 2011, and according to Edmunds.com, that works out to approximately $135 million when you consider that most of those vehicles qualified for the maximum $7,500 in tax credits. That figure does not include additional credits and rebates offered by more than a dozen states and some municipalities.

California has run out of cash for its electric vehicle incentive program.

Cash-starved California has pulled the plug on a program that provided a significant financial incentive for buyers of approved electric cars, such as the Nissan Leaf.

California was one of more than a dozen states that have enacted some form of cash incentives meant to spur the sale of high-mileage advanced-propulsion vehicles. But the program was limited by the Golden State’s financial problems. Nonetheless, buyers will still get at least one other much sought-after perk: stickers providing access to the HOV, or High Occupancy Vehicle, lanes, which can mean a significantly faster commute for those traveling alone.

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The federal government’s $7,500 tax credit for battery car buyers will remain in effect and, in fact, covers a broader range of products, including the Chevrolet Volt. The General Motors plug-in hybrid did not qualify in California because it did not meet the narrow definition of a so-called partial-zero-emission vehicle, or P-ZEV.